Saville v Hallmarc Construction Pty Ltd
[2015] VSCA 318
•27 November 2015
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2014 0132
| GREGORY PAUL SAVILLE (trading as CHINA SOURCING SERVICES) | Appellant |
| v | |
| HALLMARC CONSTRUCTION PTY LTD (ACN 071 149 758) | Respondent |
---
| JUDGES: | WARREN CJ, TATE and KAYE JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 7 May 2015 |
| DATE OF JUDGMENT: | 27 November 2015 |
| MEDIUM NEUTRAL CITATION: | [2015] VSCA 318 |
| JUDGMENT APPEALED FROM: | [2014] VSC 491 (Vickery J) |
---
ADMINISTRATIVE LAW – Judicial review – Adjudication determination under Building and Construction Industry Security of Payment Act 2002 – Reference date as a jurisdictional fact – Whether adjudication determination reviewable for jurisdictional error – Judicial review of matters not confined to straightforward calculation of time or where determination is arbitrary, capricious or otherwise irrational – Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393 applied; Sugar AustraliaPty Ltd v Southern Ocean Pty Ltd [2013] VSC 535 applied – Adjudicator fixed wrong reference date.
CONTRACT – Building contract – Adjudication determination under Building and Construction Industry Security of Payment Act 2002 – Scope of works under the contract – Pre-contractual negotiations – Source of the construction contract – Whether payment claim served out of time – Adjudication determination invalid.
PRACTICE AND PROCEDURE – Application to adduce further evidence – Evidence available and in applicant’s possession before trial – Unclear that adducing evidence would produce different result – Refaat v Barry [2015] VSCA 218; Clark v Stingel [2007] VSCA 292, considered.
---
| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr M Clarke | Vic Bar Pro Bono Scheme |
| For the Respondent | Mr M A Robins QC with Mr A Rollnik | Kliger Partners |
WARREN CJ
TATE JA:
TABLE OF CONTENTS
Introduction and summary..................................................................................... 1 The statutory scheme ………………..………………………………………………. 3 The construction contract …………………………………………………………… 8 Submissions made to the adjudicator …............................................................... 11 The adjudicator’s determination ........................................................................... 15 The judge’s reasons .................................................................................................. 17 The grounds of appeal ................................................................................................... 23 The notice of contention ............................................................................................... 25 The issues ……………………………………………………………………………… 26 (1) The scope of reviewable error by the adjudicator …………………….... 26 (2) The scope of works under the construction contract ………………….. 47 (3) The source of the construction contract ……………………………….. 54 The application to adduce further evidence ………………………………………... 58 Conclusion on the notice of contention …………………………………………... 63 Conclusion on the appeal ……………………………………………………………. 63
- - -
Introduction and summary
This is an appeal from an application for judicial review of an adjudication determination under the Building and Construction Industry Security of Payment Act 2002 (‘the Act’). It primarily concerns the question of whether the appellant,[1] Gregory Saville (‘Saville’), was out of time when he purported to serve a first payment claim under the Act and whether the judge was correct in holding that a determination by an adjudicator that Saville was within time was void.[2] The appeal also raises the question of the scope of the reviewability of a decision by an adjudicator appointed under the Act.
[1]There was no requirement for leave to appeal. The Notice of Appeal was filed on 22 October 2014 before the civil appeal reforms took effect on 10 November 2014. The civil appeal reforms impose a requirement for leave to appeal in almost all matters: see Supreme Court Act1986 s 14A.
[2]Hallmarc Construction Pty Ltd v Saville [2014] VSC 491, [28] (‘Reasons’).
In summary, on 28 February 2013, Saville, trading in the name of China Sourcing Services — KBL Studio (‘CSS’),[3] entered into a construction contract with the respondent, Hallmarc Construction Pty Ltd (‘Hallmarc’), dated 7 February 2013, for the supply and installation of joinery by Saville for a development comprising 134 residential apartments at 1148 Nepean Highway, Highett, being constructed by Hallmarc (‘the construction contract’). Although the construction contract contemplated a more formal document being executed at a later time, it was not in dispute that this did not occur. On 21 February 2014 Saville served on Hallmarc a payment claim dated 17 February 2014 (‘the first payment claim’), purportedly under the construction contract.[4] After Hallmarc failed to provide a payment schedule, Saville applied for adjudication of the payment claim by an adjudicator, Philip Martin of Adjudicate Today Pty Ltd, (‘the adjudicator’) who delivered an adjudication determination dated 28 April 2014 (‘the adjudication determination’) finding that Saville was entitled to payment of $46,328.10 including GST. In particular, the adjudicator found that the first payment claim was not out of time under the Act. He determined that the reference date was after 25 November 2013.[5] The adjudicator relied on an invoice dated 25 November 2013 from JMP Carpentry ‘for repair being made to the wardrobes that form part of [Saville’s] scope of work’ as indicating that work under the construction contract was carried out as of that date. The first payment claim was thus treated by the adjudicator as having been made within the period of three months required under the Act.[6] Following the adjudication determination, Saville served a second payment claim dated 16 May 2014 (‘the second payment claim’) for further work, but this had not been the subject of adjudication at the time the application for judicial review was brought by Hallmarc.
[3]We refer to ‘Saville’ throughout rather than CSS.
[4]The first payment claim was for $64,075.61. After Saville issued a notice of intention to apply for adjudication, Hallmarc issued a payment schedule proposing a payment of $Nil to Saville.
[5]The term ‘reference date’ is defined under s 9(2) of the Act. See [7] below.
[6]Section 14(4)(b) of the Act. See [11] below.
The judge, Vickery J, held that the adjudicator erred in holding that the reference date under the Act was after 25 November 2013. He held that the appropriate reference date under the Act was 1 October 2013. This had the effect that the first payment claim was made more than three months after the reference date and was thus invalid and the adjudication determination was void. It followed that the second payment claim was also out of time. Saville now seeks to appeal the finding that the adjudication determination was void. He also seeks to adduce further evidence in support of the appeal.
For the reasons that follow, we would dismiss the appeal and refuse the application to adduce further evidence.
We consider that the fixing of the reference date by the adjudicator is reviewable. Furthermore, we consider that the judge did nor err in concluding that the reference date fixed by the adjudicator under the Act was wrong and that as a consequence the adjudicator ought not to have assumed jurisdiction and the adjudication determination is of no legal effect. We also consider that the reasons given by the judge, in the circumstances, were adequate.
The statutory scheme
The role of an adjudicator, and the matters which he or she is to determine, are set out in s 23 of the Act. In particular, the adjudicator is required to consider the requirements of the Act and the provisions of the contract from which the application arose:
23 Adjudicator’s determination
(1) An adjudicator is to determine—
(a)the amount of the progress payment (if any) to be paid by the respondent to the claimant (the adjudicated amount); and
(b)the date on which that amount became or becomes payable; and
(c)the rate of interest payable on that amount in accordance with section 12(2).
Note
The adjudicated amount may be added to under section 45(8).
(2)In determining an adjudication application, the adjudicator must consider the following matters and those matters only —
(a)the provisions of this Act and any regulations made under this Act;
(b)subject to this Act, the provisions of the construction contract from which the application arose;
(c)the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim;
(d)the payment schedule (if any) to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of the schedule;
(e)the results of any inspection carried out by the adjudicator of any matter to which the claim relates.
Central to this dispute is the date upon which any entitlement to payment can be calculated. Section 9 of the Act deals with progress payments. It relevantly provides:
9 Rights to progress payments
(1)On and from each reference date under a construction contract, a person —
(a)who has undertaken to carry out construction work under the contract; or
(b)who has undertaken to supply related goods and services under the contract —
is entitled to a progress payment under this Act, calculated by reference to that date.
(2)In this section, reference date, in relation to a construction contract, means —
(a)a date determined by or in accordance with the terms of the contract as —
(i)a date on which a claim for a progress payment may be made; or
(ii)a date by reference to which the amount of a progress payment is to be calculated —
in relation to a specific item of construction work carried out or to be carried out or a specific item of related goods and services supplied or to be supplied under the contract; or
(b)subject to paragraphs (c) and (d), if the contract makes no express provision with respect to the matter, the date occurring 20 business days after the previous reference date or (in the case of the first reference date) the date occurring 20 business days after —
(i)construction work was first carried out under the contract; or
(ii)related goods and services were first supplied under the contract; or
(c)in the case of a single or one-off payment, if the contract makes no express provision with respect to the matter, the date immediately following the day that —
(i)construction work was last carried out under the contract; or
(ii)related goods and services were last supplied under the contract; or
(d)in the case of a final payment, if the contract makes no express provision with respect to the matter, the date immediately following —
(i)the expiry of any period provided in the contract for the rectification of defects or omissions in the construction work carried out under the contract or in related goods and services supplied under the contract, unless subparagraph (ii) applies; or
(ii)the issue under the contract of a certificate specifying the final amount payable under the contract a final certificate; or
(iii)if neither subparagraph (i) nor subparagraph (ii) applies, the day that —
(A)construction work was last carried out under the contract; or
(B)related goods and services were last supplied under the contract.
The term ‘construction work’ is defined by s 5 in the following terms:
5 Definition of construction work
(1)In this Act, construction work means any of the following work —
(a)the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures forming, or to form, part of land (whether permanent or not);
(b)the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of any works forming, or to form, part of land, including walls, roadworks, power-lines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for the purposes of land drainage or coast protection;
(c)the installation in any building, structure or works of fittings forming, or to form, part of land, including heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply, fire protection, security and communications systems;
(d)the external or internal cleaning of buildings, structures or works, so far as it is carried out in the course of their construction, alteration, repair, restoration, maintenance or extension;
(e)any operation which forms an integral part of, or is preparatory to or is for rendering complete, work of the kind referred to in paragraph (a), (b) or (c), including —
(i)site clearance, earth-moving, excavation, tunnelling and boring; and
(ii) the laying of foundations; and
(iii)the erection, maintenance or dismantling of scaffolding; and
(iv)the prefabrication of components to form part of any building, structure or works, whether carried out on-site or off-site; and
(v)site restoration, landscaping and the provision of roadways and other access works;
(f)the painting or decorating of the internal or external surfaces of any building, structure or works;
(g)any other work of a kind prescribed for the purposes of this subsection.
The phrase ‘related goods and services’ is defined by s 6 in the following terms:
6 Definition of related goods and services
(1)In this Act, related goods and services, in relation to construction work, means any of the following goods and services —
(a) goods of the following kind —
(i)materials and components to form part of any building, structure or work arising from construction work;
(ii)plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work;
(b) services of the following kind —
(i)the provision of labour to carry out construction work;
(ii)architectural, design, surveying or quantity surveying services in relation to construction work;
(iii)building, engineering, interior or exterior decoration or landscape advisory or technical services in relation to construction work;
(c)goods and services of a kind prescribed for the purposes of this subsection.
Section 12 provides the due date for payment of a payment claim:
(1)A progress payment under a construction contract becomes due and payable —
(a)on the date on which the payment becomes due and payable in accordance with the terms of the contract; or
(b)if the contract makes no express provision with respect to the matter, on the date occurring 10 business days after a payment claim is made under Part 3 in relation to the payment.
(2)Interest is payable on the unpaid amount of a progress payment that has become due and payable in accordance with subsection (1) at the greater of the following rates —
(a)the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983; or
(b) the rate specified under the construction contract.
The time for serving payment claims is governed by s 14(4) and (5):
(4)A payment claim in respect of a progress payment (other than a payment claim in respect of a progress payment that is a final, single or one-off payment) may be served only within —
(a)the period determined by or in accordance with the terms of the construction contract in respect of the carrying out of the item of construction work or the supply of the item of related goods and services to which the claim relates; or
(b)the period of 3 months after the reference date referred to in section 9(2) that relates to that progress payment —
whichever is the later.
(5)A payment claim in respect of a progress payment that is a final, single or one-off payment may be served only within —
(a)the period determined by or in accordance with the terms of the construction contract; or
(b)if no such period applies, within 3 months after the reference date referred to in section 9(2) that relates to that progress payment.
The construction contract
To determine the reference date under s 9(2) involves making a finding about when either a specific item of construction work was carried out or a specific item of related goods and services was supplied ‘under the contract’. It is necessary therefore to examine what the construction contract required of the parties.
Both the adjudicator and the judge determined that there was a construction contract for the purposes of the Act ‘being the signed letter of acceptance dated 7 February 2013 and the signed or initialled attached documents’.[7] The letter was written on Hallmarc letterhead and signed by Charbel Sarkis (‘Sarkis’), a contract administrator with Hallmarc. The relevant portions of the letter were in the following terms:
[7]Adjudication determination 5.2. See Reasons [1].
We confirm our verbal acceptance of your offer to carry out the following works in accordance with the attached scope of works and Joinery spreadsheet — REV D dated 01/02/2013:
·Supply only of Kitchen, bathroom & ensuite vanities, laundry doors & troughs, desks, shelving, and Linen press doors & internal carcasses: $507,030.00 + GST including shipping, duty and site delivery.
·Containers unload delivery into each apartment and unpack: $32,360.00 + GST.
·Supply and installation of Robes: $298,258.00 + GST.
No variation works are to be commenced without written consent from Hallmarc Construction.
As agreed, Hallmarc is prepared to pay the factory directly in line with the pro forma invoice, however we consider this to be a payment made on behalf of China Sourcing Services — KBL Studio and you will remain the principle [sic] contractor.
Prior to despatch, we require your assurance that you believe the goods leaving China meet our requirements and can be satisfactorily installed upon arrival to site.
Upon arrival to site, Hallmarc will inspect that all delivered joinery is in good conditions prior [to] releasing any cheques, including cheques released directly to KBL Studio. Hallmarc will not pay for any defective or damaged goods until they are satisfactorily repaired or replaced.
Please ensure that all required joinery will arrive on time to avoid applying liquidated damages in accordance with our agreement.
Payment terms to be 60 days from despatch from factory.
…
A copy of the draft contract will be available shortly; in the meantime, we would be pleased if you would countersign the reverse side of a copy of this letter and return it for our records.
The attached ‘Joinery Scope of Works’ included the following:[8]
[8]The underlined words reflect handwritten annotations made by Saville. Italics as in the original.
SCOPE
1.Supply bathroom and ensuite vanities to all apartments with selected finish to doors & drawers as documented.
2.Supply kitchen cabinets to all apartments with selected finish to doors & drawers as documents.
3.Supply cutlery trays and bins to kitchens.
4.Supply templates for benchtops.
5.Supply laundry doors where laundry is located in a bathroom.
6.Supply laundry trough joinery as per drawings.
7.Supply desks and shelving for study areas as per drawings.
8.Supply linen cupboards door and internal carcasses as per drawings.
9.Supply and Install robes.
10.Supply covering plugs to all exposed screw heads used to fix joinery items to wall.
11.Organise custom clearance and local container delivery.
12.Organise container unload, delivery to each apartment and unpack.
13.Note:
·In addition to requirements of the documentation, details and level of finish to be in accordance with completed Display Suite.
GENERAL:
1.Provide all set out requirements from primary grid lines and datums to complete the works.
2.Supply all required statutory certification upon completion of the works.
3.Ensure compliance with all relevant Australian Standards and other codes as required.
4.Supply all access equipment (scissor, hoist, mobile scaffold) required to complete this component of the work. Hallmark to supply above. KBL to cover cost of forklifts used for unload.
5.Coordination with other trades and attendance at site meetings (as necessary).
6.All materials handling by contractor even where supplied by Hallmarc.
7.Protect and clean all finished surfaces, fixtures and fittings until practical completion is achieved. Responsibility of joinery installer to do this.
8.Allow to place trade rubbish into bins supplied by Hallmarc. Materials and waste to be placed in bin at completion of works every day (Note: all rubbish from materials supplied by Hallmarc to be also removed and placed in bin by contractor).
9.Deliver a clean installation at handover. Relevant to wardrobe installation.
10.Site Amenities supplied by Hallmarc.
11.Supply all required statutory certification upon completion of works.
12.Ensure compliance with all relevant Australian Standards and other codes as required.
13.Provide all necessary equipment, materials and labour that may not be specified but are required to deliver a functioning and statutory compliant installation.
The attachment also set out various occupational, health and safety requirements that are not relevant to this dispute.
Saville and Sarkis signed the reverse of the letter on 28 February 2013, and initialled the attachments, which Saville had annotated in handwriting. As mentioned, although the letter contemplated a more formal contract being executed in due course, such a step was not taken. Neither the adjudicator nor the judge mentioned any additional or oral component of the construction contract beyond this letter and its attachments.
Submissions made to the adjudicator
Before the adjudicator, Saville made submissions on the fixing of the reference date. He supported his submission that the reference date was after 25 November 2013 either on the basis that JMP Carpentry was working on behalf of Saville as a subcontractor (and in effect as its agent in performing its obligations under the construction contract) and the relevant payments made by Hallmarc to JMP Carpentry were therefore paid on behalf of Saville to its subcontractor,[9] or, more generally, on the basis that the scope of the construction contract included some form of supervisory or project management role which required Saville to oversee contractors such as JMP Carpentry as they carried out general rectification and re-installation work on all joinery, and not merely on wardrobes. This was in effect how Saville framed his further written submissions to the adjudicator (dated 22 April 2014) on how the reference date should be identified.
[9]The notion of ‘agency’ was used loosely by the parties and at times appeared to be used to describe the alleged relationship between Saville and Hallmarc as the agent of Saville when Hallmarc paid Saville’s subcontractors on Saville’s behalf as opposed to the relationship between Saville as the principal and JMP Carpentry as his agent for the discharge of Saville’s contractual obligations (including allegedly the rectification of defects).
There is some uncertainty as to what the adjudicator took into account. On 17 April 2014 the adjudicator called for further submissions from the parties on the reference date.[10] However, in the adjudication determination he said:
The Claimant [Saville] provided additional submissions regarding the contract in its submissions on 22 April 2014. These submissions were not requested and have not been duly made in accordance with the provisions of the Act so have not been considered when making this determination.[11]
[10]See [30] below.
[11]Adjudication determination 5.2.
It is unclear whether the adjudicator considered that the additional submissions regarding the contract were not relevant to the question of the reference date. If so, that was an erroneous assumption. He went on to say:
The Claimant [Saville] and the Respondent [Hallmarc] provided further submissions in addition to those requested or permitted to be considered under the provisions of the Act. I have not considered the submissions made by the parties that were not in accordance with the Act. These include the Claimant's email of 23 April 2014 and the submissions made in addition to those requested by me on 17 April 2014.[12]
[12]Ibid 5.7.
In his further written submissions Saville referred to an email exchange of 21 February 2013. Those submissions said:
By further email on 21 February 2013 … Sarkis further agreed (as had previously been proposed by me) that Hallmarc would make payment of KBL authorised contractors on its behalf, as is verified took place by the invoices provided.
The email exchange said to evidence the arrangement formed part of the material that Saville seeks to introduce as further evidence on the appeal. While we deal with the application to adduce further evidence below, it is important for the email exchange to be referred to in its proper place within the narrative. The email exchange evidenced an arrangement made between Saville and Sarkis (Hallmarc) before the construction contract was signed by Saville, for Hallmarc to engage subcontractors to perform unpacking on behalf of Saville and take the cost of that unpacking out of the allowance to Saville for unloading in the construction contract:
Hi Charbel [Sarkis],
Given that we will get the labour for the container unpack from EVS and Hallmarc have an account with EVS and we have an allowance for unload, could the labourers be booked out to Hallmarc and the cost taken out of the allowance? This will be simpler than trying to bill Hallmarc now for the labour as and [sic] we are unsure of the actual cost for this stage.
Regards,
Greg Saville.
The reply was in the following terms:
That’s fine Greg.
We will be paying EVS (or relevant contractor) on behalf of you, therefore you will still be responsible of [sic] any damage if it will occur to the delivered joinery.
Kind regards,
Charbel Sarkis.
The handwritten annotation by Saville to item 4 under the heading ‘General’ of the ‘Joinery Scope of Works’ annexure,[13] which refers to ‘KBL’ (CSS) covering the ‘cost of forklifts used for unload’, is consistent with this arrangement.
[13]See [14] above.
In his further written submissions to the adjudicator, Saville described the arrangement for Hallmarc to pay Saville’s subcontractors directly:
It was agreed with Hallmarc that it would make payments directly to contractors for convenience as many contractors were common to Hallmarc and CSS also being involved in installation of Hallmarc’s own joinery under separate contract with Hallmarc …
Saville also directed the adjudicator’s attention to the 25 November 2013 invoice from JMP Carpentry (for the sum of $8,333) and asserted that the works in it included rectification to works carried out by CSS (and thus, implicitly, works within the scope of the construction contract). Saville wrote:
The works described on the invoice clearly include rectification works for defects including checking of mirror robe doors and desk repairs being works that Hallmarc has claimed against CSS for alleged defects. … The invoice from JMP Carpentry relied upon by Hallmarc proves that physical construction works under the relevant contracts were clearly carried out at least until 26 November 2013.
On the question of whether the scope of the construction contract extended to project management, it was submitted by Saville to the adjudicator that his contractual obligations extended to supervising the rectification of any defects in the joinery supplied by him. Saville relied upon the statement in the construction contract that ‘Hallmarc will not pay for any defective or damaged goods until they are satisfactorily repaired or replaced’.[14]
[14]See [13] above.
In his further written submissions to the adjudicator, Saville contended that the construction contract included technical services by way of project management which
involved checking of Hallmarc designs and drawings and in many instances noting and correcting errors, liaising with client and factory planning of production, checking of production lists and schedules, liaising with factory and co-ordination of production and delivery, administration and performance of installation works and administration and approval of contractors (both factory and installers) including rectification works and/or checking of payments made to subcontractors being correct.
In dealing with the JMP Carpentry invoice of 25 November 2013, the adjudicator did not set out the basis upon which work performed by that company related to Saville’s contractual obligations. In other words, when fixing the reference date under s 9(2) he did not explicitly consider the question of agency or make any determination about whether the arrangements for unpacking extended to any other subcontract work such as installation or to rectification and repair work generally. Rather, he appeared to consider that it was not in contest that the JMP Carpentry invoice of 25 November 2013 was for work done under the construction contract. This was raised as an issue on the appeal.[15]
[15]See [104] below.
The adjudicator’s determination
The adjudicator determined that the first payment claim was a progress claim and not a final claim. In doing so he accepted Saville’s argument that he had carried out work under the construction contract but had not completed his work, and rejected Hallmarc’s contention that Saville’s work was complete by 30 September 2013.
The adjudicator determined the reference date having regard to s 9(2)(b) of the Act,[16] which uses the date 20 business days after the previous reference date, and which calculates the first reference date using the date when construction work was first carried out under the contract, or when related goods and services were first supplied under the contract. (As discussed below,[17] this stands in contrast to the approach taken by the judge who determined that the first payment claim was a final claim and thus that the reference date was to be calculated in accordance with s 9(2)(d)[18] (relevantly, the date immediately following the day that construction work was last carried out under the contract) and not s 9(2)(b) of the Act.)
[16]See [7] above.
[17]See [42]–[44] below.
[18]See [7] above.
In his binding determination, the adjudicator made what the judge described as ‘findings and ruling on his jurisdiction to embark upon the adjudication and made a binding Adjudication Determination under the Act’.[19] Those findings and ruling included the following:
The Claimant [Saville] and the Respondent [Hallmarc] signed a letter of acceptance from the Respondent on or about 28 February 2013 for the Claimant to supply joinery items and unload them on delivery into each apartment and to supply and install robes for an amount of $921,421.80 including GST.
…
The Claimant has carried out but not completed the contract work. The Claimant submitted a payment claim on 21 February 2014. The Respondent submits that this is a final claim as the Claimant supplied and completed its work by 30 September 2013 so that the subject payment claim must be a final claim. I do not accept the Respondent’s submission. It is for the Claimant to decide if the claim is a final claim and it has not done so as set out in the Claimant’s reply to the request for further submissions. I determine that the subject payment claim is a progress claim and as such section 9(2)(b) of the Act applies in relation to the reference date.
Further submissions were requested in relation to the reference date. The Respondent submits that the reference date is 30 September 2013 being the day that the Claimant completed its work. The Claimant refers to an invoice of 25 November 2013 for repair being made to the wardrobes that form part of the Claimant’s scope of work. The Respondent does not contest this submission and as such I determine that contract work was being carried out on 25 November 2013. The claim for this work arises from a reference date after this date.
I determine that the reference date is a date determined under section 9(2)(b) of the Act calculated from the date that work commenced and being after 25 November 2013. The Respondent submits that the payment claim was served outside the period provided in the Act. The Act requires at section 14(4)(b) a payment claim in respect of a progress payment (other than in respect of the progress payment that is a final, single or one-off payment) may be served only within the period of 3 months after the reference date referred to in section 9(2) that relates to that progress payment.
The reference date is after 25 November 2013 and the payment claim was served on 21 February 2014 which is within the 3 month period.[20]
[19]Reasons [7].
[20]Adjudication determination 5.2-5.3 (emphasis added).
The adjudicator also held that the valid time for payment was 23 March 2014. He arrived at this date on the basis of the lack of objection by Hallmarc to the date for payment claimed by Saville, concluding that Hallmarc ‘agreed with the due date for payment as stated in the Claimant’s notice in not objecting at the time and providing a payment schedule’.[21]
[21]Ibid 5.1.
The adjudicator proceeded to consider the claimed amount including the invoices to which Saville had referred. He determined that the scope of work under the construction contract included project management of the works. He said:
The contract scope of work includes the Claimant’s project management of the works. The Respondent concedes in the payment schedule that the contract sum allowed for a reasonable amount for project management/sourcing and expenses.[22]
[22]Ibid 5.5.2.
He therefore found that Saville’s claim for the sourcing/project manager fee and expenses was not a variation of the construction contract and so allowed that claim. However, he found that the claim by Saville for additional work (some rectification work) was a variation to the contract that had not been authorised by Hallmarc and so could not be claimed. He also rejected the claims for additional time spent in China, and interest on outstanding payments.
As mentioned, the adjudication determination was that Saville was entitled to payment of $46,328.10. The sum ordered was $53,606.52 inclusive of interest and costs of the adjudicator.
The judge’s reasons
The judge made declarations that both the first and second payment claims did not comply with the mandatory requirements under ss 9 and 14 of the Act and were invalid. He also declared that the adjudication determination, which was founded on the first payment claim, was void. He ordered that the adjudication determination be quashed. He found that Saville is out of time to serve any further payment claims or any final payment claim under the construction contract, pursuant to the Act. He noted that the only relief potentially remaining available to Saville is to commence proceedings in an appropriate jurisdiction.
The judge supported the orders he made by accepting new evidence beyond that considered by the adjudicator.[23] He held that, on this basis, the adjudicator was mistaken and had committed a jurisdictional error in his assumption of jurisdiction:
Taking into account the new evidence presented at the trial which was relevant to the jurisdictional issue, I am satisfied that Mr Martin, the Adjudicator appointed under the Act, was mistaken in his assumption of jurisdiction in this case. As such, he fell into jurisdictional error, in the sense described in Craig. The error was that, for the purposes of the time limit running under the Act for the service of the First Payment Claim, the reference date was found by the Adjudicator to be after 25 November 2013, when this was not the case.[24]
[23]He did this on the basis of Craig v South Australia (1995) 184 CLR 163, 176 and Sugar AustraliaPty Ltd v Southern Ocean Pty Ltd [2013] VSC 535.
[24]Reasons [9] (emphasis added).
The judge did not further characterise the jurisdictional error as an error of jurisdictional fact or otherwise but it would appear from his characterisation of the adjudicator as having been ‘mistaken in his assumption of jurisdiction’[25] that he considered that the adjudicator had made an erroneous finding of fact on which his jurisdiction to embark on the adjudication depended; that is, he had erred with respect to a jurisdictional fact. This appears to be confirmed by the declaration the judge ultimately made that:
[T]he Adjudication Determination made by the Second Defendant, Mr Martin, which was founded on the First Payment Claim, is void.[26]
[25]Ibid.
[26]Reasons [30] (emphasis added). Declaration 1(b) of the Orders made 7 October 2014.
The judge accepted affidavit evidence by a director of Hallmarc, Joseph Italiano (‘Italiano’), and by Sarkis (relevantly, an affidavit sworn by Sarkis on 16 July 2014) that the work that was done relevantly to the 25 November 2013 invoice was not done on Saville’s behalf but was done solely for Hallmarc. It was thus not work performed under the construction contract. It could not therefore extend the work carried out by, or on behalf of, Saville, beyond the date of 30 September 2013. His Honour said:
In relation to the work done pursuant to the invoice of 25 November 2013, which was relied upon by the Adjudicator to make a finding that this was the last date when Mr Saville performed work under the Construction Contract, it is to be noted that the Construction Contract did not require Mr Saville to review or assess the invoices of installation contractors engaged by the Plaintiff to install the joinery or rectify defects in the joinery supplied.
With regard to the work done evidenced by the 25 November invoice, Mr Joseph Italiano, a director of Hallmarc, gave evidence to the following effect, which I accept:
I am informed by Charbel Sarkis and verily believe that, there were various defects in the joinery supplied and installed by the First Defendant, such that the Plaintiff itself engaged other contractors directly to rectify defective of joinery and installation. This was instituted solely by the Plaintiff and was not done pursuant to any agreement or arrangement between the Plaintiff and any of the First Defendant ‘Kbl Studio’ or ‘China Sourcing Services’.[27]
[27]Ibid [10]–[11] (emphasis added).
The judge went on to say:
Further, Mr Charbel Sarkis, a contract administrator employed by Hallmarc, gave unchallenged evidence before this Court that:
Various Items of the joinery supplied by the First Defendant were defective and required additional work by the joinery contractors engaged by the Plaintiff to install the joinery. For example, an email to me from Marc McAlpine from Max Joinery & Installations Pty Ltd dated 8 October 2013 sets out various defects identified in the joinery provided by the First Defendant.
Accordingly, the Plaintiff itself engaged joinery contractors after the First Defendant had left the site to rectify defects in the joinery supplied by the First Defendant.
One of the contractors engaged by the Plaintiff to perform rectification work was JMP Carpentry. In September 2013 I called Jake Panozzo from JMP and engaged him to undertake joinery works on hourly rate basis. On 25 October 2013 and on 25 November 2013, JMP Carpentry rendered invoices to the Plaintiff for work that it performed on the Project which invoices were paid by the Plaintiff on 30 October 2013 and 6 December 2013 respectively.[28]
[28]Ibid [12] (emphasis as in original).
The judge found that the construction contract did not provide for the issue of any final certificate or any defects liability period. He rejected the view that when JMP Carpentry was engaged in rectifying defects it was performing any contractual obligation of Saville’s as its agent or subcontractor. He said:
I find that late in 2013, Hallmarc directly engaged its own contractor, JMP Carpentry, to attend to rectification works on its own behalf. I reject the contention advanced by Mr Saville that JMP Carpentry was engaged by Hallmarc as Mr Saville’s agent. [29]
[29]Ibid [14].
The judge noted that as the construction contract did not itself provide for the calculation of reference dates under the Act, rectification periods, final claims or time for payment for Saville’s claims, the default provisions under the Act applied, including, as mentioned, those for the calculation of reference dates under s 9(2)(b) and (d)[30] and the determination of the time within which Saville had to serve any valid payment claims under s 14(5)(b).[31]
[30]See [7] above.
[31]See [11] above.
By contrast with the adjudicator, the judge held that the first payment claim was a final payment claim.[32] He relied on statements contained in the payment claim served by Saville on Hallmarc, which he found ‘in form and in substance [was] couched as a final claim’.[33] The judge noted that the first payment claim said:
A final payment to CSS is claimed herewith for work under contract and contract variations.[34]
[32]Reasons [20]. He also considered the second payment claim to be a final payment claim. He said that they ‘were both claims which sought a “final balancing of account” between the contracting parties as described by Finkelstein J in Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248, [17]’.
[33]Reasons [20].
[34]Ibid.
It also provided:
CSS hereby gives notice that as CSS has received no further verified claims for rectification it considers that Hallmarc requires no further supply or rectification, and that performance of the contract by CSS is therefore complete and that any further liability of CSS for rectification ceases as of today.
The judge therefore applied s 9(2)(d) of the Act which provides that the reference date is the date immediately following the day when construction work was last carried out under the contract, or when related goods and services were last supplied under the contract.[35]
[35]See [7] above.
He found that the last day on which Saville had performed work under the construction contract, or provided related goods or services, was 30 September 2013. He based this finding upon the affidavit evidence of Italiano and Sarkis. He said:
Mr Joseph Italiano, a director of Hallmarc, gave evidence to the following effect:
I am informed by Charbel Sarkis, the Plaintiff’s contract administrator for the Project and verily believe that:
a)Goods were last despatched from the factory and delivered to the Project Site in August 2013.
b)The First Defendant ceased performing work under the Construction Contract on 30 September 2013, being the date on which he last attended the Project site to clean up and remove his tools and materials.
To my knowledge, after 30 September 2013, the First Defendant has not supplied any joinery to the Plaintiff, installed any Joinery at the Project, attended to rectification of any defects in the joinery supplied or installed by him at the Project or attended the Project site at all. To my knowledge, after that date, no subcontractors nor any other servants or agents of the First Defendant, ‘Kbl Studio’ or ‘China Sourcing Services’ ever returned to the site or provided to the Plaintiff any related goods or services, nor was any construction work undertaken by them, under the Construction Contract.
Mr Charbel Sarkis, a contract administrator employed by Hallmarc, gave evidence that:
[In] September 2013, the First Defendant was last on site to undertake final cleaning of the basement where his goods and tools were stored throughout construction. No subcontractors nor any other servants or agents of the First Defendant, ‘Kbl Studio’ or ‘China Sourcing Services’ ever returned to the site or provided to the plaintiff any related goods or services, nor was any construction work undertaken by them, under the Construction Contract after that date.
In particular, I say that the First Defendant did not supply or install any joinery or rectify any defects in joinery supplied or attend the Project site after 30 September.
I accept the evidence that the last date on which Mr Saville last undertook construction work, or provided related goods or services, under the Construction Contract was 30 September 2013.[36]
[36]Reasons [17]–[19].
Having determined that the last day on which Saville carried out construction work under the construction contract was 30 September 2013, he found that the reference date, being the date immediately following that date, pursuant to s 9(2)(d)(iii),[37] was 1 October 2013. He held that the service of the first payment claim (21 February 2014) was not undertaken within the time provided by s 14(5)(b) of the Act, namely within three months after 1 October 2013 (that is, the reference date referred to in s 9(2)(d)(iii)). The last day for valid service of a payment claim was 1 January 2014. It followed that Saville’s purported service of the first payment claim was almost seven weeks in excess of the mandatory time limit.
[37]See [7] above.
The judge concluded:
In Jotham Property Holdings Pty Ltd v Cooperative Builders Pty Ltd & Ors the Court emphasised that, while the Act is intended to provide for the rapid determination of progress claims under construction contracts, without the parties becoming weighed down in lengthy and expensive litigation or arbitration (which would tend to suggest that excessive technicality in the construction of its provisions should be avoided), nevertheless the clear time limits in the Act which are mandatory need to be strictly observed in order to properly balance the relevant competing interests. In this regard, the Court said:
[T]he Act gives very valuable, and commercially important, advantages to builders and subcontractors. It alters the balance of power in favour of those parties in relation to progress payments in a significant way. In recognition of this position, the availability of the rights conferred by the Act are governed by, and depend upon, the observance of clear specifications of time and the other requirements expressed in the Act, either in mandatory terms or as defined prohibitions. These provisions are to be found at each stage of the regime for enforcement of the statutory right to progress payments. Such provisions, in accordance with the legislative purpose expressed in the text of each, call for strict observance.
I have found that the last date on which Mr Saville last undertook construction work, or provided related goods or services, under the Construction Contract was 30 September 2013. The date immediately following was 1 October 2013, when time under s 14(5)(b) of the Act began to run. This meant that [the] payment claim in respect of a final payment could be served only within three months of 1 October 2013, which is 1 January 2014.
Accordingly, the First Payment Claim being served on 21 February 2014 and the Second Payment Claim being served on 16 May 2014 were both hopelessly out of time.
It follows from these findings that both purported First and Second Payment Claims failed to comply with the mandatory requirements under ss 9 and 14 of the Act, and were invalid.
It also follows that the Adjudication Determination made by the Second Defendant Mr Martin, which was founded on the First Payment Claim, is void.
It further follows that Mr Saville is out of time to serve any further Payment Claims or any Final Payment Claim under the Construction Contract, pursuant to the Act. His only remedy is to seek recourse for any payment he claims may be due to him in proceedings in a Court of the appropriate jurisdiction, should he be so advised to pursue such proceedings.[38]
[38]Reasons [24]–[29] (citations omitted).
In summary, the foundation of the judge’s reasoning was that the work performed referable to the invoice of 25 November 2013 was work performed solely for Hallmarc and did not reflect either construction work undertaken by Saville, or the supply of related goods and services by Saville, or on his behalf, pursuant to the construction contract. The reference date fixed by the adjudicator (after 25 November 2013) was thus in error. The first payment claim and the adjudication application made out of time were therefore void. The adjudicator was mistaken in his assumption of jurisdiction. These matters were directly challenged on appeal, as was the scope of reviewable error with respect to the adjudication determination.
The grounds of appeal
The grounds of appeal relied on by Saville are:
1. The judge erred in finding that the adjudication was mistaken in determining as a fact that Saville last performed work under the construction contract on 25 November 2013 was a reviewable error of law in an application for judicial review or on certiorari.
2. The judge erred in finding that the adjudication was mistaken in determining as a fact repairs being carried out to wardrobes in November 2013 form part of Saville’s scope of work under the construction contract was a reviewable error of law in an application for judicial review or on certiorari.
3. The judge erred in finding that the adjudication was mistaken in determining the respondent was not entitled under the construction contract to take work out of the hands of Saville was a reviewable error of law in an application for judicial review or on certiorari.
4. The judge erred in finding that the adjudication was mistaken in determining as a fact the due date for payment of the claim sent on 21 February 2014 was 23 March 2014, was a reviewable error of law in an application for judicial review or on certiorari.
5. The judge erred in finding that the adjudication was mistaken in determining as a fact Saville’s scope of work included the supply of joinery items including organising, co-ordinating and checking goods before delivery to Hallmarc, unloading the containers, and supply and installing the wardrobes.
6. The judge erred in finding that the adjudication was mistaken in determining as a fact, Hallmarc had taken work that was within Saville’s scope of work out of his hands and completed the work without his agreement.
7. The judge failed to deal with the substantial point raised by Saville that the letter dated 7 February 2013 was not the sole repository of the agreement between Saville and Hallmarc or to assign reasons for rejection or exclusion of the point raised.
8. The judge erred in failing to deal with or explain or assign reasons for excluding or rejecting evidence contained in specified paragraphs of various of Saville’s affidavits[[39]] as to installation work performed between 30 September and 25 November 2013, as to the documents and discussions constituting the agreement between the parties, as to the works the subject of invoices rendered by JMP Carpentry, and as to reconciliation sheets referring to those invoices.
9. The primary judge erred in failing to consider and apply or to explain the exclusion of the principle enunciated in Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd,[40] raised and relied upon by Saville, that a reviewable error relating to the validity of the adjudication is limited to straightforward calculations of time or determinations that are arbitrary, capricious and irrational.
[39]These are particularised in the Amended Notice of Appeal and each paragraph is dealt with below.
[40](2010) 78 NSWLR 393, [102].
It is noteworthy that the grounds of appeal do not place in issue the character of the first payment claim, the payment claim served on 21 February 2014, as a final payment claim. It follows that s 9(2)(d) of the Act is the critical provision for the disposition of the appeal.
The notice of contention
Hallmarc has filed a notice of contention raising the following grounds for affirming the judge’s decision:
1.If, as Saville contends (but which contention Hallmarc disputes), it was not open for the judge to prefer, and the judge in fact wrongly preferred, Hallmarc’s evidence to Saville’s evidence on the question of the date when Saville last performed work under the construction contract, then Hallmarc contends that Saville’s evidence in this regard, namely:
(a) Saville affidavit sworn 21 May 2014, in particular [141], [143], [144] & [147]; and
(b) Saville affidavit sworn 16 July 2014, in particular [10], [63], [67], [108], [129], [131] & [134]–[142],
was inadmissible and ought to have been excluded on the grounds set out in Hallmarc’s notice of objection to evidence dated 23 July 2014, but which objection the judge failed to expressly rule upon or address in the course of his Honour’s judgment.
2. Insofar as Saville seeks to rely upon evidence of antecedent negotiations between the parties in order to add to, vary, depart or resile from the terms of the written contract executed by the parties on 28 February 2013, then such evidence was inadmissible and ought to have been excluded on the basis of authorities such as Codelfa Construction Pty Ltd v State Rail Authority (NSW);[41] Brambles Holdings Ltd v Bathurst City Council;[42] Ambridge Investments Pty Ltd (in liq) (rec apptd) v Baker;[43] FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd[44] and Lederberger v Mediterranean Olives Financial Pty Ltd,[45] which authorities were expressly relied upon in Hallmarc's Outline of Submissions in Reply dated 5 August 2014, but which objection the judge failed to expressly rule upon or address in the course of his Honour’s judgment.
[41](1982) 149 CLR 337, 352 (Mason J).
[42](2001) 53 NSWLR 153, 163–5 (Heydon JA).
[43][2010] VSC 59, [160], [198]–[200] (Vickery J).
[44][1993] 2 VR 343, 350 (Brooking J, Nathan and Eames JJ agreeing).
[45](2012) 38 VR 509, 516–9 [23]–[29] (Nettle and Redlich JJA and Beach AJA).
The issues
It is convenient to consider the grounds of appeal as raising the following issues:
(1) The scope of reviewable error by the adjudicator;[46]
(2) The scope of works under the construction contract;[47]
(3) The source of the construction contract.[48]
[46]Grounds 1, 2, 3, 4 and 9.
[47]Grounds 5, 6 and 8(a), (c), (d) and (f).
[48]Grounds 7 and 8(b) and (e).
At the hearing of the appeal, there was considerable reliance placed upon the question of the extent of reviewable error with respect to the adjudicator’s determination. It is useful to start with an examination of this issue.
(1) The scope of reviewable error by the adjudicator
Saville contends that the judge erred in finding that the determination by the adjudicator that Saville last performed work under the construction contract on 25 November 2013 was a reviewable error of fact in an application for judicial review or an application for certiorari. In other words, he submits that the judge was wrong to characterise the date on which Saville last undertook work as a ‘jurisdictional fact’; that is, a fact which is ‘an essential preliminary or a condition precedent’[49] to the assumption of jurisdiction.
[49]Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369, 385 (Starke J). See also Windeyer J in R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361, 399 who described a jurisdictional fact as a ‘condition of jurisdiction’. See further R v Blakeley; Ex parte Association of Architects of Australia (1950) 82 CLR 54.
A jurisdictional fact is an event, fact, or circumstance which, as Dixon J observed in Parisienne Basket Shoes Pty Ltd v Whyte,[50] is ‘made a condition upon the occurrence or exercise of which the jurisdiction of a court shall depend.’[51]
[50](1938) 59 CLR 369.
[51]Ibid 391.
In City of Enfield v Development Assessment Commission,[52] the High Court described a ‘jurisdictional fact’ as the criterion that must be satisfied before a statutory power is enlivened:
The term ‘jurisdictional fact’ (which may be a complex of elements) is often used to identify that criterion, satisfaction of which enlivens the power of the decision-maker to exercise a discretion.[53]
[52](2000) 199 CLR 135 (‘Enfield’).
[53]Ibid 148 [28].
This understanding was further reflected in Gedeon v Commissioner of the New South Wales Commission:[54]
The expression ‘jurisdictional fact’ … is used to identify a criterion the satisfaction of which enlivens the exercise of the statutory power or discretion in question. If the criterion be not satisfied then the decision purportedly made in exercise of the power or discretion will have been made without the necessary statutory authority required of the decision maker.[55]
[54](2008) 236 CLR 120 (‘Gedeon’).
[55]Ibid 139 [43].
In Gedeon, the Court illustrated the meaning of ‘jurisdictional fact’ by reference to an observation by Latham CJ in R v Connell; Ex parte Hetton Bellbird Collieries Ltd[56] in which an industrial body could not begin to deal with the issue of rates of remuneration unless it first determined that the rates were anomalous:
The concept appears from the following passage in the reasons of Latham CJ in R v Connell; Ex parte Hetton Bellbird Collieries Ltd:
‘The subject matter with which the Industrial Authority deals is, inter alia, rates of remuneration. There is power to deal with this subject matter in respect of rates of remuneration which existed on the specified date only if the authority is satisfied that the rates in question are anomalous. Unless this condition is fulfilled, the authority cannot act — it is a condition of jurisdiction.’[57]
[56](1944) 69 CLR 407, 429–30.
[57](2008) 236 CLR 120, 139 [44] (citations omitted).
If a matter amounts to a jurisdictional fact it is reviewable by a superior court to determine if the decision maker was correct in finding that the pre-condition of its jurisdiction was satisfied and thus that its statutory power was enlivened.[58] Moreover, it is reviewable, in effect, de novo, that is, by reference to the evidence available to the reviewing court. This was confirmed in Enfield:[59]
where the question is whether the decision-maker has erred as to the jurisdictional facts … that question has to be answered by the court in which it is litigated upon the evidence before that court.[60]
[58]Putting to one side jurisdictional errors in failing to find that a jurisdictional fact exists leading to a failure or refusal to assume jurisdiction.
[59](2000) 199 CLR 135.
[60]Ibid 146 [22].
Where the jurisdictional fact is the existence of a fact, the reviewing court can determine on the balance of probabilities whether the fact exists.
An assumption of jurisdiction when the statutory conditions precedent for the exercise of that jurisdiction are not satisfied is a jurisdictional error resulting, relevantly, in the decision becoming a nullity[61] as ‘a decision involving jurisdictional error has no legal foundation and is properly to be regarded, in law, as no decision at all’.[62]
[61]Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 (‘Bhardwaj’). The judge described the adjudication determination as ‘void’: Reasons [28]. See [37] above.
[62]Bhardwaj (2002) 209 CLR 597, 616 [53].
Errors made with respect to a jurisdictional fact are thus to be distinguished from, relevantly, errors of fact-finding made by an administrative tribunal within the course of an enquiry properly embarked upon. Errors made within jurisdiction (non jurisdictional errors) are unreviewable in a proceeding for judicial review[63] save where the error amounts to an error of law on the face of the record.[64] As the High Court observed in Refugee Review Tribunal; Ex parte Aala:[65]
The difficulty of drawing a bright line between jurisdictional error and error in the exercise of jurisdiction should not be permitted, however, to obscure the difference that is illustrated by considering clear cases of each species of error. There is a jurisdictional error if the decision maker makes a decision outside the limits of the functions and powers conferred on him or her, or does something which he or she lacks power to do. By contrast, incorrectly deciding something which the decision maker is authorised to decide is an error within jurisdiction. (This is sometimes described as authority to go wrong, that is, to decide matters within jurisdiction incorrectly.) The former kind of error concerns departures from limits upon the exercise of power. The latter does not.[66]
[63]Enfield (2000) 199 CLR 135, 153–4 [44]. Whether such an error is subject to a right of appeal depends upon the relevant legislation.
[64]R v Northumberland Compensation Appeal Tribunal; Ex parte Shaw [1952] 1 KB 338; Hockey v Yelland (1984) 157 CLR 124.
[65](2000) 204 CLR 82 (‘Aala’).
[66]Ibid 141 [163].
Saville submits that the finding made by the adjudicator fell within the scope of facts which he was empowered to determine that are not capable of review. Saville relies upon Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd[67] and the following remarks of Basten JA:
[102]The opinion of the Tribunal that its jurisdiction was engaged cannot be arbitrary, capricious or irrational and must be an opinion open to a reasonable person correctly understanding the meaning of the law under which authority is conferred … . Although … the Court may be slow to intervene where authority depends upon a matter of ‘opinion or policy or taste’ …, that will not be so where authority depends upon a straightforward calculation of time, as in the present case.[68]
[67](2010) 78 NSWLR 393 (‘Chase Oyster Bar’).
[68]Ibid 417 [102] (citations omitted).
Saville further argues that the reasoning of Basten JA was adopted by Vickery J in another case involving a dispute under the Act, Sugar Australia Pty Ltd v Southern Ocean Pty Ltd,[69] when he said:
It is well established in the case law, including for example Grocon Constructors Pty Ltd v Planit Cocciardi Joint Venture [(No 2)][[70]] … that errors of fact in the usual case, where the question in issue is referred by the empowering statute to a tribunal to determine, are not regarded as errors of law, which are capable of review on an application on certiorari. In other words an adjudicator charged with the making of an adjudication determination under the Act is entitled to make an error of fact and not have that decision reviewed judicially. This is sometimes described as the ‘power to make a wrong decision’.[71]
[69][2013] VSC 535 (‘Sugar Australia’).
[70](2009) 26 VR 172 (‘Grocon’). Grocon is also a decision of Vickery J.
[71]Sugar Australia [2013] VSC 535, [9] (citations omitted).
The circumstances in Chase Oyster Bar involved a straightforward miscalculation of time under s 17(2)(a) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (‘the NSW Act’). The NSW Act establishes a regime comparable to that created under the Act. Section 17 of the NSW Act provides:
17 Adjudication applications
(1)A claimant may apply for adjudication of a payment claim (an adjudication application) if:
(a)the respondent provides a payment schedule under Division 1 but:
(i)the scheduled amount indicated in the payment schedule is less than the claimed amount indicated in the payment claim, or
(ii)the respondent fails to pay the whole or any part of the scheduled amount to the claimant by the due date for payment of the amount, or
(b)the respondent fails to provide a payment schedule to the claimant under Division 1 and fails to pay the whole or any part of the claimed amount by the due date for payment of the amount.
(2)An adjudication application to which subsection (1)(b) applies cannot be made unless:
(a)the claimant has notified the respondent, within the period of 20 business days immediately following the due date for payment, of the claimant’s intention to apply for adjudication of the payment claim, and
(b)the respondent has been given an opportunity to provide a payment schedule to the claimant within 5 business days after receiving the claimant’s notice.
Chase Oyster Bar Pty Ltd (‘Chase’) and Hamo Industries Pty Ltd (‘Hamo’) contracted for Hamo to carry out fitout work for Chase at the Chase Oyster Bar in Chatswood Chase, a large shopping centre in Chatswood, Sydney, New South Wales. Hamo made a number of payment claims. The payment claim at issue was served on Chase on 31 December 2009. Chase did not provide a payment schedule in response to the relevant payment claim. The due date for payment of the claimed amount was 13 January 2010. Chase’s failure to provide a payment schedule meant that it became liable to pay the claimed amount to Hamo on the due date but did not do so. Hamo sought to make an adjudication application. Pursuant to s 17(2)(a) of the NSW Act Hamo could not apply for an adjudication unless it notified Chase, within 20 business days after 13 January 2010, of its intention to apply for adjudication. Hamo did not give notice of its intention to apply for adjudication until 11 February 2010, which is outside the 20 business days period allowed for under the NSW Act. An adjudicator was appointed and made a determination concluding that Hamo was entitled to the claimed amount, together with interest. He found that Hamo’s notice pursuant to s 17(2)(a) of the NSW Act had been given within the time required.
Questions were removed into the New South Wales Court of Appeal specifically to consider whether determinations made by adjudicators are subject to the supervisory jurisdiction of the Supreme Court and amenable to orders in the nature of certiorari. The New South Wales Court of Appeal (Spigelman CJ, Basten JA and McDougall J) held that determinations made by adjudicators are reviewable by the Supreme Court for jurisdictional error and that an incorrect finding that s 17(2)(a) had been complied with is vitiated by jurisdictional error.[72] It held that in the circumstances of the case the adjudication application had not been made in compliance with s 17(2)(a) of the NSW Act, McDougall J describing the finding of compliance by the adjudicator to be ‘plainly wrong’.[73] The Court further held that the determination of the adjudicator made in the absence of a valid adjudication application is invalid. The reasoning differed amongst the judges, an issue to which we will return. Suffice it to say here that McDougall J held that the giving of notice in time under s 17(2)(a) is a jurisdictional fact.[74]
[72]The Court held that insofar as Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421 (‘Brodyn’) held that an order in the nature of certiorari was not available to quash or set aside a decision of an adjudicator under s 17(2)(a) of the NSW Act, it was in error. (Vickery J had already held that Brodyn did not apply in Victoria: Grocon (2009) 26 VR 172, 195–99 [85]–[102].) The Court also held that an ouster clause in the NSW Act did not preclude judicial review, especially in the light of Kirkv Industrial Court of New South Wales (2010) 239 CLR 531 (‘Kirk’).
[73]Chase Oyster Bar (2010) 78 NSWLR 393, 420 [121].
[74]Ibid 440 [222]. In the context of the Act see also Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd [2015] VSC 233 [81]–[88] (Vickery J).
Saville submits that the circumstances in Chase Oyster Bar involved a straightforward calculation of time and compliance with s 17(2)(a) was reviewable because of that. By contrast, he submits, in the present case, the determination made by the adjudicator that the reference date was after 25 November 2013 was not a straightforward calculation of time but rather was a matter that depended upon evaluation and opinion involving, having regard to the evidence before him, making findings on the following issues, none of which Saville claims are capable of review:
(1) when work was last performed under the construction contract;
(2) what work was carried out between 30 September 2013 and 25 November 2013;
(3) whether the work fell within the scope of works under the construction contract.
Furthermore, Saville claims the judge did not consider whether the opinion of the adjudicator was arbitrary, capricious or irrational, or an opinion open to a reasonable person, and that, in any event, the adjudicator’s opinion as to the date on which Saville last performed work under the contract was reasonably open to him and was not arbitrary, capricious or irrational.
In response, Hallmarc submits that its case before the judge, and on appeal, is that the first payment claim was a final payment claim and was served outside the mandatory time period stipulated by s 9(2)(d) of the Act. Accordingly, the first payment claim did not constitute a valid payment claim under the Act and could not found a valid jurisdictional basis for an adjudication under the Act. It submits that the judge, having accepted this submission, did not have to consider all the other challenges raised by Saville. Hallmarc argues that it was common ground at trial that Saville last attended the construction site or directly provided construction goods or services to Hallmarc on 30 September 2013 and that the basis for Saville’s insistence that the work carried out by JMP Carpentry was performed as his agent never rose above bare and inadmissible assertion. It was a question of fact as to who engaged that subcontractor and on what basis, and only Hallmarc’s witnesses gave direct evidence about such matters. Saville did not seek to cross-examine either Sarkis or Italiano on this or in any other respect. Hallmarc submits that Saville did not put before the judge any admissible evidence of an express agency relationship. Moreover, having left the site by 30 September 2013, Hallmarc submits Saville was in breach of the construction contract and he cannot now avail himself of his own wrongdoing by claiming that the necessary rectification works were performed by JMP Carpentry as his agent where there is no evidence of such an agency.
The issue of whether JMP Carpentry was acting as Saville’s agent is a central factual question going to the validity of the first payment claim under the Act and the adjudicator’s jurisdiction. Hallmarc submits that this is a paradigm example of a matter of jurisdictional error which was open to the judge to consider by way of judicial review. In support, Hallmarc also points to observations made by Vickery J in Sugar Australia approving remarks of Basten JA in Chase Oyster Bar:
Critically, an adjudicator is given no express power in s 23 of the … Act, or anywhere else in the Act, to decide facts which may go to his or her jurisdiction.
In Chase Oyster Bar, Basten JA determined that the power to determine compliance with the jurisdictional requirements which work to confer jurisdiction on the adjudicator is not given to the adjudicator. Further, the Court is not bound by any finding that these requirements have been met.
Basten JA said in this regard:
The power to determine compliance with the essential requirements of an Adjudication Application could lie with the authorised nominating authority (to whom the application is made), the adjudicator (to whom the application is referred) or the Court exercising its supervisory jurisdiction.
The structure of the Act might suggest that it would be inappropriate to refer an invalid Adjudication Application to an adjudicator; there would then be an implied obligation on the authorised nominating authority to consider the validity of the application made to it. Arguably the duty to refer an application to an adjudicator (see s 17(6)) is limited to a valid Adjudication Application. However, as no party before this Court argued for that construction, it may be put to one side.
The second possibility is that power to determine the validity of an Adjudication Application lies with the adjudicator. In a practical sense, there is much to recommend the view that the adjudicator is able to determine whether the application complies with provisions such as s 17(2)(a), as the adjudicator sought to do in the present case. However, there are factors which support a contrary view. First, s 22(1), identifying that which the adjudicator is to determine, makes no reference to the validity of the Adjudication Application. Secondly, s 22(2), limits the matters which the adjudicator is entitled to consider to the Act, the provisions of the construction contract, the payment claim, the payment schedule, submissions in support of either and the results of any inspection. In a provision which renders the consideration of any other material impermissible, the absence of any reference to the circumstances in which the Adjudication Application was made is highly significant.
Thirdly, the descriptions of the matters to which payment claims and payment schedules must relate and hence (at least implicitly) the matters to which the submissions in support can properly refer, do not expressly identify any aspect of the circumstances in which the Adjudication Application was made.
For these reasons, the proper construction of the Security of Payment Act is that it does not permit the adjudicator to determine the validity of the Adjudication Application. The challenge in the present case must therefore be determined on the basis of facts found by the Court.[[75]]
These observations of Basten JA were expressly adopted by McDougall J in Chase Oyster Bar.[76]
[75]Chase Oyster Bar (2010) 78 NSWLR 393, 416–17 [97]–[101].
[76]Sugar Australia [2013] VSC 535, [107]–[110].
Vickery J went on to say in Sugar Australia that: (1) an adjudicator is not permitted under the Act to finally determine the validity of an adjudication application; and (2) any challenge to the assumption of jurisdiction by an adjudicator must be finally determined by a court on judicial review. He sought to explain earlier comments he had made in Grocon:
In the light of Kirk and Chase Oyster Bar, the statements referred to in paras [115]–[116] of Grocon, call for some clarification and qualification.
In Grocon it was said:
With the exception of the case where the basic and essential requirements of the Act for a valid determination are not satisfied, or where the purported determination is not a bona fide attempt to exercise the power granted under the Act, if the Act does make the jurisdiction of an adjudicator contingent upon the actual existence of a state of facts, as distinguished from the adjudicator’s determination that the facts do exist to confer jurisdiction, in my opinion the legislation would not work as it was intended to. Unnecessary challenges to the jurisdiction of an adjudicator appointed under the Act would expose the procedures to delay, cost and expense. The very purpose of the Act would be compromised.
For these reasons, in my opinion, in order to serve the purposes of the Act, the intention of the legislation is to confer upon an adjudicator the capacity to determine facts which go to his or her jurisdiction, subject to exceptions of the type to which I have referred. It follows that, in making those determinations, the Act confers on adjudicators jurisdiction to make an incorrect decision in relation to such jurisdictional facts which will not be overturned by certiorari.
For the purposes of s 18 of the … Act, it appears to me that the elements of the section which serve to confer jurisdiction on an adjudicator to make a valid determination under s 23, on the proper construction of the Act, do not permit the adjudicator to finally determine the validity of the adjudication application. If there be any challenge to the jurisdiction assumed by the adjudicator it must [be] finally determined on the basis of facts found by the Court on judicial review, in the course of determining whether a jurisdictional error has been exposed which calls for the exercise of the Court’s discretion to grant relief in the nature of certiorari and, if necessary, mandamus. The Court may grant relief on such relevant evidence as may be adduced before it, whether or not such evidence was before the adjudicator at first instance. Further, the Court may grant such relief without regard to any determination which may have been made on the issue of jurisdiction by the adjudicator. The Court is obliged to arrive at its own conclusion as to jurisdiction based on the law and on the facts as found by it.
This is not to say that an adjudicator should not make any findings of fact or rulings on law if a question of jurisdiction is raised in the course of determining an adjudication application. Clearly if an adjudicator is presented with material or submissions which bring into question the jurisdiction of the adjudicator, he or she should determine the question and give reasons for the findings of fact or rulings on law. If however the adjudicator’s decision on jurisdiction is challenged in Court on judicial review, the Court may deal with the matter afresh and receive additional evidence on the matter if the additional evidence is relevant to the determination of the question.[77]
[77][2013] VSC 535, [111]–[114] (citations omitted).
Vickery J acknowledged in Sugar Australia that if the view he expressed therein was inconsistent with what he had earlier said in Grocon then he did not follow his earlier ruling:
To the extent that anything inconsistent with this conclusion appears in paras [115]–[116] of Grocon, in the light of the later reasoning of the High Court in Kirk and of the New South Wales Court of Appeal which followed it in Chase Oyster Bar, I do not follow my earlier ruling.[78]
[78]Ibid [115].
Hallmarc submits that Saville’s written submissions misconstrue what Basten JA said at [102] in Chase Oyster Bar.[79] It is plain that these remarks were subject to the broader principles identified in the preceding paragraph of Basten JA’s reasons, as is apparent when the paragraphs are read in their entirety:
[101] For these reasons, the proper construction of the Security of Payment Act is that it does not permit the adjudicator to determine the validity of the adjudication application. The challenge in the present case must therefore be determined on the basis of facts found by the Court.
When a judge decides an application under s 93(4)(d) of the Act the judge is under a duty to provide reasons for his or her decision. Furthermore, while the extent of the reasons will depend upon the circumstances of the case, the reasons should deal with the substantial points which have been raised; include findings on material questions of fact; refer to the evidence or other material upon which those finding[s] are based; and provide an intelligible explanation of the process of reasoning that has led the judge from the evidence to the findings and from the findings to the ultimate conclusion. It should also be understood that the requirement to refer to the evidence is not limited to the evidence that has been accepted and acted upon. If a party has relied on evidence or material which the judge has rejected, the judge should refer to that evidence or material and, in giving reasons which deal with the substantial points that have been raised, explain why that evidence or material has been rejected. There may be exceptions. But, ordinarily, where a judge rejects or excludes from consideration evidence or other material which is relevant and cogent, it is simply not possible to give fair and sensible reasons for the decision without adverting to and assigning reasons for the rejection or exclusion of that material. Similarly, while it is not incumbent upon the judge to deal with every argument and issue that might arise in the course of a case, where an argument is substantial or an issue is significant, it is necessary to refer to and assign reasons for the rejection of the argument or the resolution of the issue. Above all the judge should bear steadily in mind that reasons are not intelligible if they leave the reader to wonder which of a number of possible routes has been taken to the conclusion expressed. Failure to expose the path of reasoning is an error of law.[145]
[144](2005) 43 MVR 130.
[145](2005) 43 MVR 130, 136–7 [21] (Nettle JA, Batt and Vincent JJA agreeing) (citations omitted).
Nettle JA went on to say:
These points are encapsulated in the judgment of Chernov JA in Barlow v Hollis. As his Honour there said, the fact that a judge may not mention some matter relevant to the disposition of a s 93(4)(d) application does not necessarily mean that his or her judgment is deficient. For example, matters which are obvious need not be restated, and the element of value judgment involved in the determination of such an application does not always lend itself to the degree of precision in expression that can be achieved in other matters. But interlocutory in nature though these applications have now been determined to be, in reality they are finally determinative of rights. If an application is rejected, it is the end of the road for the applicant. And if the application is successful, it is odds on that the matter will settle. Logic and fairness dictate that the reasons for judgment of such an application should be of a standard which is commensurate with that degree of finality.[146]
[146]Ibid 137 [22].
The particular evidence which Saville alleges the judge failed to provide adequate reasons for rejecting is identified as the evidence of Saville given in [5], [6], [7], [8], [95] and [96] of his affidavit sworn 16 July 2014 with respect to the documents and discussions constituting the construction contract between Saville and Hallmarc[147] and exhibit ‘GS-17A’ to Saville’s affidavit sworn on 30 July 2014 regarding JMP Carpentry invoices accepted in Saville’s reconciliation spreadsheet (Exhibit ‘GS-15’) for works carried out between 30 September to 25 November 2013.[148]
[147]Ground 8(b) of the grounds of appeal.
[148]Ground 8(f) of the grounds of appeal.
In [5], [6], [7], [8], [95] and [96] of Saville’s affidavit sworn 16 July 2014 Saville deposes that:
(1) a basic agreement was reached between Saville and Warren Keighran (Hallmarc) on 24 January 2013; a letter was sent by Saville dated 24 January 2013 and emails were exchanged between them on 24 and 25 January 2013;
(2) there was a verbal agreement with Keighran that Saville would be responsible for wardrobe supply only and oversee production and dispatch of the non-wardrobe joinery in return for a project management fee;
(3) Hallmarc contracted separately with the factory in China for the non-wardrobe joinery by way of a separate contract;
(4) It was agreed that Saville contracted for supply and installation of wardrobes only and to facilitate production, arrange delivery and provide unpacking of all the goods;
(5) As Saville had to remain in China it was agreed that Hallmarc would pay subcontractors ‘engaged by way of agency on [Saville’s] behalf’ as necessary to provide installation of wardrobes and unpacking services, and Hallmarc was to claim the cost of this back from Saville on his approval of the invoices.
Saville exhibited the email he sent on 24 January and Keighran’s reply on 25 January and a further email response of Saville’s on 29 January.
The letter of 24 January 2013 clearly consisted of proposed terms of agreement. It raises the issue of oversight of invoices but makes it plain that this is not yet a matter which has been resolved. For example, the letter says:
If it is agreed that Hallmarc pay unpackers and wardrobe installation contractor directly, [Saville] shall oversee and approve such invoices prior to any payment by Hallmarc to ensure that such payments fall within the budget allowance and should they exceed the budget allowance must be approved by [Saville].[149]
[149]Emphasis added.
The two emails are principally concerned with the arrangements proposed by Saville for payment of the manufacturer in China and how to manage the cash flow to ensure quick turnaround. Keighran expresses a preference not to have to pay the factory in China directly and suggests other measures for having cash available to Saville for a quick turnaround.
It is clear that these communications amounted to pre-contractual negotiations. Antecedent communications prior to the execution of a written contract form no part of the contract and are inadmissible as to the terms of the contract save as to resolve ambiguity. In the well-known words of Mason J in Codelfa Construction Pty Ltd v State Rail Authority(NSW):[150]
The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although … if the facts are notorious knowledge of them will be presumed.
It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction ...[151]
[150](1982) 149 CLR 337 (‘Codelfa’).
[151]Ibid 352 (emphasis added). Stephen and Wilson JJ agreed with Mason J (at 344 and 392 respectively). See also Brambles Holdings Ltd v Bathhurst City Council (2001) 53 NSWLR 153, 163 [24].
In our view, the judge construed the construction contract on the basis of the plain and unambiguous terms agreed in the letter of 7 February 2013[152] and he was right to do so. Although the judge made no express reference to the attachment, the ‘Joinery Scope of Works’, there is nothing to suggest he did not treat this as part of what he described as the ‘written construction contract’,[153] especially as the first paragraph of the letter of 7 February 2013 makes express reference to the acceptance of Saville’s offer to ‘carry out the following works in accordance with the attached scope of works and Joinery spreadsheet’.[154] The pre-contractual negotiations, of which the letter of 24 January 2013, and the emails of 24, 25 and 29 January 2013 are evidence, are superseded by, and merged in, the construction contract itself.[155] The same is true of the email exchange of 21 February 2013 that is also sought to be relied upon.[156]
[152]See [13]–[14] above.
[153]Reasons [1].
[154]See [13] above.
[155]Indeed, this seemed to be conceded on the appeal.
[156]See [21] above and [130] below.
The general difficulty faced by the judge is that he had two competing complex narratives of what had occurred between the parties which clearly gave rise to questions of credibility yet there was no cross-examination of any witness. The trial was conducted wholly on the basis of a series of opposing affidavits. As Saville chose not to cross-examine Sarkis or Italiano, the judge was entitled to prefer their evidence given that it was not otherwise implausible or logically untenable.
Moreover, the judge was mindful that Saville retained his alternative avenue of redress, namely, a proceeding in a court, a factor relied upon in Chase Oyster Bar.[157] The judge’s disposition of the claim under the Act did not finally resolve the rights of the parties under the construction contract. While the judge’s reasons were swift, and an analysis of the conflicting affidavit evidence relied upon (including the documents exhibited) would have enabled Saville more readily to understand why his position was rejected, the judge was placed in a position where he did not have the assistance of oral testimony that had been tested by cross-examination and on the basis of which he could have made fully informed findings of credibility. In the particular circumstances, we consider that his reasons were adequate.[158]
[157]Reasons [29]. See [47] above.
[158]It follows that we reject grounds 7, and 8(b) and (e).
The application to adduce further evidence
Saville seeks leave to adduce further evidence on the appeal.
He seeks to adduce evidence of an affidavit sworn by Sarkis (Hallmarc) on 23 June 2014 (‘the Sarkis 23 June 2014 affidavit’). The Sarkis 23 June 2014 affidavit was not referred to by Saville at trial, nor tendered. It was not included in the Court Book before the judge and not drawn to his attention. It was prepared by Hallmarc’s legal representatives and lodged with the adjudicator as an attachment to Hallmarc’s adjudication response of 23 June 2014. This occurred in the context of the second adjudication that occurred after the filing of the second payment claim which had not been adjudicated upon at the time the application for judicial review was heard.[159] The judge held that the second payment claim had also been served ‘hopelessly out of time’.[160]
[159]See [2] above.
[160]Reasons [26].
Saville submits that the Sarkis 23 June 2014 affidavit contradicts the evidence in the affidavit Sarkis swore on 16 July 2014, as well as an affidavit of Italiano sworn on the same day, upon which the judge relied.
Saville submits that the Sarkis 23 June 2014 affidavit contains the following concessions relevant to Saville’s claim that the work carried out by JMP Carpentry on 25 November 2013 was carried out on behalf of Saville:
(1) [32] Hallmarc received invoices from ‘labour contractors engaged by the Respondent [Hallmarc] on behalf of the Claimant [Saville]’ (this is the description given to exhibit ‘CS-20’);
(2) [32] Hallmarc received invoices from ‘contractors engaged by the Respondent [Hallmarc] to provide labour on behalf of the Claimant [Saville]’ (this is the description given to exhibit ‘CS-21’);
(3) [39] ‘One of the contractors engaged by the Respondent [Hallmarc] to perform rectification work was JMP Carpentry’ which rendered invoices on 25 October 2013 and 25 November 2013;
(4) [40] ‘The Respondent [Hallmarc] paid various local contractors a total of the sum of $243,454.29 for the rectification of defective workmanship performed by the Claimant and for carrying out work that the Claimant [Saville] was required to perform under the Construction Contract but omitted to provide’;
(5) [41] The Respondent received invoices from contractors for the costs incurred in respect of performing remedial work and for ‘work carried out by the Claimant and work that ought to have been carried out by the Claimant’.
The email exchange of 21 February 2013 referred to above,[161] exhibited to the Sarkis 23 June 2014 affidavit, is also relied upon by Saville.
[161]See [21] above.
Saville submits that the further evidence is relevant, of probative value, and combined with the evidence that was before the judge, would have affected the result. He claims that Hallmarc can claim no prejudice given that its legal representatives prepared the document.
Hallmarc submits that the application should be refused as the evidence was in Saville’s possession before the trial.
Furthermore, Hallmarc submits that the evidence does not contradict the evidence given by Sarkis on 16 July 2014 and, fairly considered as a whole, makes it plain that JMP Carpentry was directly engaged by Hallmarc in Hallmarc’s own right.
The Sarkis 23 June 2014 affidavit describes Hallmarc’s engagement of contractors to fulfil Saville’s contractual obligations as restricted to unpacking the containers. Sarkis states:
[31]The Claimant [Saville] was assisted in the unloading and unpacking of joinery delivered to the site by Mario Angelo who was the Claimant’s representative on site. The Claimant lacked adequate resources to unpack containers delivered to site and requested the Respondent [Hallmarc] arrange for labour to unpack the containers and agreed that the cost of such labour would be taken from the contract sum.
…
[32]The Respondent engaged other contractors to provide labour to unpack the containers.[162]
[162]Emphasis added.
The bundle of invoices from labour contractors exhibited in support of [32][163] are loosely identified as relating to ‘contractors engaged by the Respondent on behalf of the Claimant’ but the spreadsheet exhibited[164] distinguishes between labour contractors engaged by Hallmarc on behalf of Saville to unpack the containers as well as details of amounts paid to ‘various local contractors … for the rectification of defective workmanship performed by [Saville] and for carrying out work that [Saville] was required to perform under the Construction Contract but omitted to provide’.[165] This work is also referred to in [129(4)] above. While the former category uncontroversially indicates engagement on behalf of Saville, the latter does not. At least on one reading, the latter category does not indicate that labour contractors were engaged by Hallmarc to perform rectification work that was to be performed by Saville but rather that labour contractors were engaged by Hallmarc to rectify defective work performed by Saville and other work that was not completed by Saville. The same observation can be made in relation to the statement at [129((5)] above. This reflects the distinction drawn above.[166]
[163]‘CS-20’ and ‘CS-21’ exhibited to the Sarkis 23 June 2014 affidavit.
[164]Within ‘CS-20’.
[165]Sarkis 23 June 2014 affidavit, [40].
[166]See [103] above.
The spreadsheet lists invoices under three headings, ‘Payment made to China Sourcing Services (CSS)’ [Saville]; ‘Payment made on behalf of China Sourcing Services (CSS)’ [Saville] and ‘Costs of Rectification of Defective Work by Saville’. The JMP Carpentry invoices are listed under the third category.
Furthermore, in the Sarkis 23 June 2014 affidavit, Sarkis went on to explain that Hallmarc directly engaged joinery contractors to rectify defects in joinery supplied by Saville. He said:
[37]Various items of the joinery supplied by the Claimant [Saville] were defective and required additional work by joinery contractors engaged by the Respondent [Hallmarc] to install the joinery. …
[38]Accordingly, the Respondent itself engaged various joinery contractors after the Claimant had left the site to rectify defects in the joinery supplied by the Claimant.
[39] One of the contractors engaged by the respondent to perform rectification works was JMP Carpentry. In September 2013 I called Jake Panozzo from JMP and engaged him to undertake joinery works on [an] hourly rate basis. On 25 October 2013 and on 25 November 2013, JMP Carpentry rendered invoices to the Respondent for work that it performed on the Project which invoices were paid by the Respondent on 30 October 2013 and 6 December 2013.[167]
[167]See the evidence of Sarkis to substantially the same effect referred to in [39] above.
The test for success on an application to adduce further evidence on appeal is stringent. In a recent decision, Refaat v Barry,[168] this Court[169] made some observations on the question of adducing further evidence on appeal:
[168][2015] VSCA 218 (‘Refaat’).
[169]Warren CJ, Ashley and Tate JJA.
The Court has power to receive further evidence on questions of fact pursuant to r 64.22(3) of the Supreme Court (General Civil Procedure) Rules 2005. In Clark v Stingel, the Court described the applicable principles in the following way:
The principles upon which the Court will give leave to introduce fresh evidence upon an appeal are not in doubt. Leave should be given only if:
• By the exercise of reasonable diligence such evidence could not have been discovered in time to be used in the original trial.
• It is reasonably clear that if the evidence had been available at the trial, and had been adduced, an opposite result would have been produced.
• The evidence proposed to be adduced is reasonably credible.
In Commonwealth Bank of Australia v Quade, the High Court observed that ‘[s]uch a stringent rule … is supported by considerations of both justice and public interest’, specifically the public interest in the ‘finality of litigation in other than the truly exceptional case’.[170]
[170]Refaat [2015] VSCA 218, [76]–[77] (citations omitted).
In our view the test in Clark v Stingel[171] has not been satisfied here. The evidence was available and in Saville’s possession before trial and it is not at all
reasonably clear that if the evidence had been adduced at trial an opposite result would have been produced; indeed, as we have sought to explain, the evidence is ultimately supportive of Hallmarc.
[171][2007] VSCA 292.
We would refuse the application for leave to adduce further evidence.
Conclusion on the notice of contention
It has proved unnecessary to determine the Notice of Contention.
Conclusion on the appeal
We have concluded that the determination by the adjudicator that the reference date was after 25 November 2013 was reviewable for jurisdictional error as a jurisdictional fact.
We have also concluded that the judge did not err in finding that the reference date under s 9(2)(d) of the Act was 1 October 2013 on the basis that the work performed pursuant to the 25 November 2013 was not undertaken by Saville nor carried out on Saville’s behalf. The last date on which work was carried out by, or on behalf of Saville, was therefore 30 September 2013.
It follows that the judge did not err in holding that the first payment claim was served out of time and the adjudicator was wrong to assume jurisdiction. The adjudication determination was of no legal force or effect.
The application to adduce further evidence on the appeal should be refused.
The appeal should be dismissed.
KAYE JA:
For the reasons stated by the Chief Justice and Tate JA, I agree that the appeal should be dismissed.
26
12
0